Constitutional Court Canceled the Obligatory Collateral for Tax Cases
Torehan Buyuksoy,Erdinc Dalar
As per article 27 of the Administrative Judgment, Procedure Law numbered 2577 (“Law No.2577”), in case the conditions that implementation of an administrative act, irreparable or impossible damages arise and the administrative act is not legal are jointly existed, after taking the defense of the administration or after the defense period has expired, suspension of execution decision may be ruled. Exceptionally, in case the administrative act may be depleted with applying, a suspension of execution decision can be ruled without waiting defense of the administration.
The regulation stipulates to deposit a guarantee calculated as %50 of the subject of the case to obtain suspension of execution decision in the lawsuits initiated regarding taxes requested to be refunded pursuant to tax laws had been added to article 27/4 of Law No.2577 with article 2 of the Law No.7351. The Constitutional Court decided to cancel said regulation on the grounds that it violated Article 125 of the Constitution with the verdict dated June 1, 2022, numbered 2022/14 E. and 2022/70 K.
Article 125 of the Constitution
It is regulated in Article 125 of the Constitution that:
“Recourse to judicial review shall be available against all actions and acts of administration. In concession, conditions and contracts concerning public services and national or international arbitration may be suggested to settle the disputes arising from them. Only those disputes involving an element of foreignness may be submitted to international arbitration.
Recourse to judicial review shall be available against all decisions taken by the Supreme Military Council regarding expulsion from the armed forces except acts regarding promotion and retiring due to lack of tenure.
The time limit to file a lawsuit against an administrative act begins from the date of written notification of the act.
Judicial power is limited to the review of the legality of administrative actions and acts, and in no case may it be used as a review of expediency. No judicial ruling shall be passed which restricts the exercise of the executive function in accordance with the forms and principles prescribed by law, which has the quality of an administrative action and act, or which removes discretionary powers.
A justified decision regarding the suspension of execution of an administrative act may be issued, should its implementation result in damages that are difficult or impossible to compensate for, and, at the same time, the act would be clearly unlawful.
The law may restrict the issuing of order on suspension of execution of an administrative act in cases of state of emergency, mobilization, and state of war, or on the grounds of national security, public order, and public health.
The administration shall be liable to compensate for damages resulting from its actions and acts”
With the examination of paragraph 5 of the article, the conditions of the suspension of execution decision can be determined. These conditions have been moved in article 27 of Law No.2577. In paragraph 6 of article 125 of the Constitution, exceptional restrictions for the suspension of execution decisions are regulated.
Evaluation of the Constitutional Court
In the verdict dated June 1, 2022, numbered 2022/14 E. and 2022/70 K., the Constitutional Court separated the conditions to restrict the rendering suspension of execution decision as essential restricts and procedural restricts.
In said verdict, the Constitutional Court said that paragraph 6 of article 125 of the Constitution can be applied for the essential restrictions. As for the procedural restrictions, the judicial review shall be carried out by paragraph 5. It is mentioned in the Constitutional Court decision that in case of some procedural restrictions to rendering a suspension of execution decision, the important thing is whether the procedural restrictions render the stay of execution meaningless and dysfunctional and make it difficult to render a suspension of execution decision.
The Constitutional Court opines that the restriction regulated with article 2 of Law No.7351 is a procedural restriction and The Constitutional Court has examined the conformity of this restriction per paragraph 5 of article 125 of the Constitution. On that note, The Constitutional Court decided that even though a court is of the opinion that the condition of irreparable or impossible damages exists, the regulation added to article 27/4 of Law No.2577 may prevent rendering a suspension of execution decision.
On the other hand, with the regulation added to article 27/4 of Law No.2577 breaches the judicial discretion of the court on the necessity of guarantee and amount of guarantee. Therefore, said regulation breaches article 125/5 of the Constitution from the Constitutional Court’s perspective.
As explained above, the Constitutional Court decided the regulation added to article 27/4 of Law No.2577 with article 2 of Law No.7351 breaches paragraph 5 of article 125 of the Constitution for the reasons that said regulation prevents to render a suspension of execution decision even though the conditions of suspension of execution decision are existed and, violate the judicial discretion of the court on the necessity of guarantee and amount of guarantee.